Earnings Previews: Campbell Soup, United Natural Foods
For the next few weeks, we’re only going to get a relative handful of earnings reports as the June quarter winds down. Monday brought no reports either before markets opened or after they closed. Likewise, no reports from last Friday are in Monday’s spotlight.
After markets close Monday and before they reopen Tuesday, we will highlight results from four companies: Academy Sports, Chico’s, Marvell Technology and Stitch Fix.
This preview looks at two firms reporting earnings before markets open Wednesday.
Campbell Soup
Packaged food giant Campbell Soup Co. (NYSE: CPB) saw its share price gain less than 1% in 2020. This year, the shares are up about 4% to date. That’s the smallest gain among peers like Kraft Heinz (up nearly 30%), General Mills (up about 11%) and Kellogg (up about 9%). When the company reported fiscal second-quarter earnings in March, it beat estimates by a whisker and offered mixed guidance.
This stock is one that analysts mostly rate a Hold (10 of 17 ratings). Only two brokers rate the shares a Buy. At a recent price of around $49.50, the stock’s potential upside to a consensus price target of $51.10 is about 3.2%. At the high target of $60.00, upside potential is about 21%.
For the fiscal third quarter, analysts expect earnings per share (EPS) of $0.66, down 20% year over year, on sales of $2 billion, down 10% year over year. For the fiscal year ending in July, forecasts call for EPS of $3.07 (flat year over year) on sales of $8.43 billion (down 3%).
The stock trades at a multiple of 16.2 times expected 2021 EPS, 16.3 times estimated 2022 earnings and 15.7 times estimated 2023 earnings. The stock’s 52-week trading range is $44.53 to $54.08, and the average daily trading volume is 2.2 million shares. Campbell’s Soup pays an annual dividend of $1.48 (yield of 2.98%).
United Natural Foods
Food distribution company United Natural Foods Inc. (NASDAQ: UNFI) posted a share-price gain of more than 82% in 2020, and the stock has soared by 146% so far in 2021. Since January of 2020, the stock is up nearly 340%. Over the past six quarters, revenue has risen by at least 4.5% sequentially, and EBITDA has risen by 23% to 60% per quarter over the same period. The company reported $40 million in cash and equivalents at the end of the prior quarter and cash flow from operations of $265 million.
Despite United Natural’s solid results, most brokerages rate the stock a Hold (11 of 21), with just five rating the stock a Buy or Strong Buy. At a price of around $39.20, shares have outrun their consensus price target of $34.25. At the high target of $46.00, upside potential is about 17%.
Analysts are looking for fiscal third-quarter EPS of $0.88 (down nearly 43% year over year) on sales of $6.8 billion (up 2%). For the 2021 fiscal year ending in July, forecasts call for EPS of $3.42 (up 29%) on sales of $27.21 billion (up 2.6%).
The stock trades at a multiple of 11.5 times expected 2021 EPS, 11.1 times estimated 2022 earnings and 10.4 times estimated 2023 earnings. The stock’s 52-week range is $14.23 to $42.40. The average daily trading volume is 1.2 million shares. United Natural does not pay a dividend.
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